"Beep~ Warning at '80-Year-Old High-Difficulty Investment Surge' Branch... Protecting Consumers from Damage"

NH Nonghyup Aims to Be First in Banking Sector to Establish Internal Control System for Consumer Protection
Aims to Early Block Consumer Damage
Total 15 Consumer Damage Risk Indicator Items
1,118 Branches Monitored in Real Time by Headquarters

[Asia Economy Reporter Shim Nayoung] "Beep~ There is a branch where the subscription rate for high-risk investment products among ultra-elderly investors aged 80 and over has increased." "Beep~ There is a branch that has not registered suspected accounts for tied deposits (suspicious transactions involving demands to subscribe to financial products such as deposits, insurance, and funds under the pretext of loans, known as 'kkeokgi')."

NH Nonghyup is the first in the banking sector to establish an internal control system for consumer protection. The core is to select indicators where consumers transacting at bank branches are highly likely to suffer damage and to monitor the occurrence trends in real time by branch. The consumer risk indicators of 1,118 branches nationwide (829 branches, 289 sub-branches) will be directly managed by the head office. Until now, each branch conducted self-inspections, but the goal of introducing this system is to block consumer damage at an early stage.

According to the financial sector on the 14th, Nonghyup is preparing the 'NH Nonghyup Bank Consumer Protection Internal Control System' aiming for introduction in December. The Financial Consumer Protection Act, now in its second year of enforcement, includes a clause requiring each bank to establish 'internal control regulations.' Nonghyup has gone a step further by computerizing consumer risk situations. The first screen of the dashboard monitored by the head office's Consumer Protection Department displays the 'risk indicator status,' showing the number of branches that have reached the consumer damage 'caution limit' and 'danger limit.' Improvement plans and their implementation status are also displayed. Each branch can frequently check warnings received from the head office.

The total number of items used to judge consumer damage risk indicators is 15. These include ▲ cases where a financial consumer requests an inappropriate loan amount relative to their assets when applying for a secured loan, and the branch should not grant the loan but does so by requiring the customer to sign a 'Voluntary Financial Contract Confirmation' ▲ cases exceeding the subscription rate of high-difficulty financial investment products by ultra-elderly investors ▲ suspected 'kkeokgi' transactions ▲ investment cases where investor propensity analysis was conducted more than twice within a short period ▲ insurance cases terminated early due to poor solicitation ▲ cases transferred to branches with 'insufficient' results from happy calls, among others.

Kwon Jun-hak, President of NH Nonghyup Bank

These cases correspond to situations where branches use irregular methods to boost performance or sell high-risk financial products to financially vulnerable groups without providing basic information about the product and investment risks. When the head office's Consumer Protection Department detects abnormal signs, it issues warnings to branches, and the system reflects inspection results and improvement implementation status by branch in real time.

NH Nonghyup Bank President Kwon Junhak said, "It is more meaningful because we proactively created an internal control system in line with the Financial Consumer Protection Act and incorporated employees' ideas," adding, "We will further advance the system using artificial intelligence (AI) in the future."

This content was produced with the assistance of AI translation services.